Contents
- Positioning
- Choosing a legal form
- UG
- GmbH
- Sole proprietorship
- Registrations
- Qualifications & requirements
- Costs
- Staffing
Do you have questions about setting up a business in Germany?
- Startup expert
- 10+ years experience
Hi, I’m Andreas and I’ve been advising businesses in Germany for over a decade. I’d be happy to call you and answer any questions you have in a one-on-one consultation.
Positioning: An advertising agency with a unique selling point
What kind of advertising agency do you want to establish? Whether your bread and butter is marketing, content, branding or web design, nobody can cover all facets of the advertising industry. Particularly in this sector where competition is so intense and varied, it’s important to define your own niche. Your business idea should be unique and must be formulated and communicated accordingly. Start with the rough concept and work your way into the details. The following key questions will help you. Add your own questions and formulate your individual business model.
- Core business: What’s the core business of your agency? What are your competencies?
- Services/products: Which additional services do you offer?
- Target group: Who are typical clients for your agency services? What needs do you cover?
- Catchment area: In which sector do you want to actively recruit clients?
- Partners and cooperation: Who can help you enter the market?
- Human resources: What does an ideal set-up for your advertising agency look like?
- Knowledge: What kind of know-how is available how can it be added through new hires?
- USP: Which unique services do you offer your advertising agency’s clients? Does your corporate design reflect this unique selling point?
- Marketing and sales: How can you win and retain customers?
In the second step, you should position your own advertising agency on the existing market. A comprehensive analysis of the competition is a prerequisite.
- Competition: Which competitors are currently on the market? Which characteristics can you recognise? How do clients perceive your competing advertising agencies and their services?
- Look for open spaces: Where are there niches to place yourself on the market with a new advertising agency?
- Needs: Where is there an unmet demand for your desired target group?
- Distinction: How do you differentiate yourself from other advertising agencies on the market?
- Perception: How do you communicate the market niche of your advertising agency? Which emotions do you want to create?
Choosing a legal form: The legal basis of your Werbeagentur
As a founder of a new business, you must decide which legal form you would like to use. For advertising agencies, the UG (haftungsbeschränkt), GmbH or GbR legal forms are the most frequent choices. When opening an advertising agency, you could also think about establishing a sole proprietorship. Be aware that the individual legal forms also differ from a tax perspective.
Here’s a brief overview of the common legal forms that are suitable if you’re setting up an advertising agency:
Forming an advertising agency as a UG (haftungsbeschränkt)
The UG (haftungsbeschränkt) stands for Unternehmergesellschaft (haftungsbeschränkt) – in English, entrepreneurial company (limited liability) – is a special form of GmbH. It’s particularly suitable for advertising agency founders who want to set up a limited liability company with little start-up capital.
Advantages: A UG only requires a share capital of just €1, which means the total formation costs are lower than those of a GmbH.
Liability: A UG has limited liability. That means that partners are generally liable exclusively with the company’s assets and not with their own private assets.
Forming an advertising agency as a GmbH
The shareholders of a GmbH, or limited liability company, are required to invest a total share capital of €25,000.
Benefits: The GmbH is a very popular and highly regarded form of enterprise, in Germany and also abroad.
Liability: The partners do not assume any personal liability, but are liable with the company’s assets.
Establishing an advertising agency as a sole proprietorship
The sole proprietorship is the simplest legal form with easy registration and no accounting obligation.
Advantages: No capital contribution is required.
Liability: Careful, the sole proprietor is also liable with his or her private assets.
Establishing an advertising agency as GbR
The GbR, or partnership under civil law, is a variant of the partnership in which all partners are also managing directors (Geschäftsführer).
Advantages: There are no minimum capital or notary requirements.
Liability: The partners are also liable with their private assets.
Don’t know which legal form is best for your business?
Book a free consultation & let us advise you on your options
Generally speaking, all the German legal forms are available to you. The choice of the appropriate legal form for your company depends on many individual factors. Don’t hesitate to ask for help. Founder experts, tax consultants and lawyers offer support for founders in every industry.
Checklist: Where do I have to register my advertising agency?
You can only really get started as the self-employed owner of an advertising agency once your founding phase has reached the major milestones. Here you will find the most important stops at public authorities and insurance companies as a guide.
Register as an advertising agency
Regardless of the legal form (Rechtsform) you have chosen, you must register at the trade office (Gewerbeamt) responsible for your company headquarters.
If you get the green light from the trade office, the tax office (Steueramt) will automatically contact you for tax registration. As soon as your documents have been reviewed and checked by the tax office, you will receive your tax number (Steuernummer) and may issue invoices.
Business registration in Hamburg (download form)
Business registration in Munich (download form)
Business registration in Cologne (download form)
Business registration in Frankfurt (download form)
Commercial register entry for advertising agencies
Membership in the Chamber of Industry and Commerce
Trade association for advertising agencies
Federal associations for the advertising industry
As the owner of an advertising agency, we recommend that you become a member of a specialised association that represents your interests and those of the industry nationwide. For advertising and marketing agencies, this is the General Association of Communications Agencies (Gesamtverband Kommunikationsagenturen – GWA), the Central Association of the German Advertising Industry (Zentralverband der deutschen Werbewirtschaft – ZAW) or the German Association for Digital Economy (Bundesverband Digitale Wirtschaft – BVDW).
Opening an advertising agency: Qualifications & requirements
Classic advertising agencies are included in the creative industry. There are no professional requirements that you as a founder have to meet. However, professional experience is absolutely essential in order to gain a foothold in a competitive industry. Regardless of whether you yourself are in the advertising industry or have a career in a related sector: your skills are central to the success of your advertising agency. Your original discipline is secondary if project management, sales and marketing are your areas of expertise.
As an independent agency owner, you are commercially active and thus responsible for all financial and personnel decisions. In addition to industry knowledge, entrepreneurial knowledge is also essential. Accounting, legal, management and personnel management are areas in which you should acquire comprehensive knowledge through further training.
Financial planning: What are the costs involved?
Every business start-up should be based on a detailed business plan. After all, thorough financial planning is the pillar on which your successful start into self-employment stands. So take your time to include all relevant cost points in your business plan for establishing your agency. Based on this calculation, you can begin the cost forecast for your first fiscal year.
You can use the following list as a guide:
- Formation costs (consultation, official fees)
- Acquisition costs (office equipment, technical equipment, software and IT, office supplies)
- Costs for a website (web design, domain, content, ads)
- Costs for advertising material and customer acquisition
- Ongoing operating costs (e.g. rental costs for offices, electricity and heating costs, software and IT services, accounting)
- Staff costs for your employees
- Taxes
- Insurance (trade insurance, social insurance, professional indemnity insurance, trade association fees)
- IHK fees
- Financial reserves
The costs you have to cover will also determine your rate. Calculate how much your agency’s services cost to make it viable as a business and start selling them as soon as your advertising agency is operational.
Staffing: Recruiting the right people
Your goal is to establish a marketing agency with sustainable success. Not to be neglected is the right composition of your team. Media designers will likely only make up a small part of your staff. These professions and fields of activity are usually found in an advertising agency:
- Sales and account management
- Design/graphic design
- Marketing (print/online)
- Business development
- Accounting and office management
- Staff
- Content creation/copywriters
- Photography/photo design
- IT and web design
Freelancers are common in the industry. Be aware that you may have to make contributions to the Artists’ Social Fund (Künstlersozialkasse) if you employ artists (photographers, publicists, designers). Use Germany-based, industry-relevant job portals such as werbeagenturjobs.de to find experienced applicants.
Offering career opportunities
The advertising industry is a fast-moving business. The employment of interns, contract work on a freelance basis and a high degree of fluctuation are common practices. Therefore, keeping a good team together is a discipline to be mastered. In addition to fair salary payments, consistent further training is an opportunity to maintain a functioning team.
Any more questions? You can also read our How to Open Your Own Agency guide.
Which legal form works best for you?
Find the right expert for your business idea
Got questions about setting up a business in Germany?
- Startup expert
- 10+ years experience
Hi, I’m Andreas and I’ve been advising businesses in Germany for over a decade. I’d be happy to call you and answer any questions you have in a one-on-one consultation.
